TORONTO - Canada approved China's biggest overseas energy acquisition, a $15.1 billion takeover by state-owned CNOOC of Canadian oil and gas producer Nexen, but vowed Friday to reject any future foreign takeovers in the oil sands sector by state owned companies.
Prime Minister Stephen Harper said the government would only consider future takeover deals in the oil sands by state-owned companies in exceptional circumstances.
"To be blunt, Canadians have not spent years reducing ownership of sectors of the economy by our own governments only to see them bought and controlled by foreign governments instead," Harper said.
This July 10, aerial photo shows a Nexen oil sands facility near Fort McMurray, Alberta, Canada. On Friday, Canada approved China's biggest overseas energy acquisition, a $15.1 billion takeover by state-owned CNOOC of Canadian oil and gas producer Nexen.
Harper's Conservative government has been studying whether CNOOC's deal and a smaller foreign takeover, Malaysian state-owned oil firm Petronas' $5.2 billion bid for Progress Energy, represent a "net benefit" to the country. The Harper government also approved the Petronas deal on Friday.
The prime minister's comments shed light on Canada's policy toward foreign takeovers in the oil sands, particularly when the foreign company is owned by the state.
Concerns have been raised that approvals could lead to a flood of deals that put control of Canada's vast energy resources in foreign hands.
"I do not believe that any major industrialized country would allow a major sector of its economy to be transformed into the property of a foreign government through a couple of transactions," Harper said.
The prime minister said the Alberta oil sands represent 60 percent of all the oil production around the world that is not already in state hands and said he wants to keep it that way.
"The government's concern has been that very quickly a series of large-scale controlling transactions by foreign state-owned companies could rapidly transform this industry from one that is essentially a free market industry to one that is effectively under the control of a foreign government," Harper said.
"That is obviously not something that we find desirable."
CNOOC and other big state-owned Asian energy companies have increased purchases of oil and gas assets in the Americas as part of a global strategy to gain access to resources needed to fuel their economies. Chinese companies have moved more carefully since CNOOC tried seven years ago to buy Unocal but was rejected by U.S. lawmakers who cited national security fears.